United States: Debt Ceiling, Credit Rating

A report yesterday said that both Fitch and Moody's have a negative view on
the U.S. economic outlook, and that Fitch has warned that if the U.S. Federal
Government fails to raise the debt ceiling in a 'timely manner' (whatever that
means) it will prompt a formal review of Fitch's current AAA U.S. credit rating.

You will recall that Standard & Poor's made big headlines in August 2011
when it then dropped its U.S. credit rating from AAA in the aftermath of the
last U.S. debt ceiling negotiations.

I am not reading too much into any of this. Expect a lot of media focus on
the upcoming U.S. debt ceiling negotiations. I say 'expect more of the same'
by way of partisan political position, and dysfunctional negotiations - but
in the end expect:

I disagree that the U.S. debt ceiling concept is wrong-headed. U.S. Federal
spending is out of control when measured against its current GDP and near-term
economic growth prospects. The debt ceiling is the only real 'check and balance'
barrier to U.S. Federal Government spending I know of in circumstances of a
polarized U.S. Federal government.

Through his www.BusinessTransitionSimplified.com website
and his Business Transition & Valuation Review newsletter Ian R. Campbell
shares his perspectives on business transition, business valuation and world
economic and financial markets influences on those two topics. A recognized
business valuation and transition authority, he founded Toronto based Campbell
Valuation Partners Limited (1976). He currently is working to bring his business
valuation and transition experience to both business owners and their advisors
in our new economic, business and financial markets normal.